Johnson & Johnson files for FDA approval of it’s Covid-19 Vaccine

 J&J submits FDA application for emergency use authorization for COVID-19 vaccine

Johnson & Johnson (JNJ) announced that Janssen Biotech, Inc., has submitted an application to the U.S. Food and Drug Administration requesting Emergency Use Authorization for its investigational single-dose Janssen COVID-19 vaccine candidate.

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JNJ files for approval of Covid-19 vaccine

The company’s EUA submission is based on topline efficacy and safety data from the Phase 3 ENSEMBLE clinical trial, demonstrating that the investigational single-dose vaccine met all primary and key secondary endpoints.

The Company expects to have product available to ship immediately following authorization. “Today’s submission for Emergency Use Authorization of our investigational single-shot COVID-19 vaccine is a pivotal step toward reducing the burden of disease for people globally and putting an end to the pandemic,” said Paul Stoffels, M.D., Vice Chairman of the Executive Committee and Chief Scientific Officer at Johnson & Johnson.

“Upon authorization of our investigational COVID-19 vaccine for emergency use, we are ready to begin shipping. With our submission to the FDA and our ongoing reviews with other health authorities around the world, we are working with great urgency to make our investigational vaccine available to the public as quickly as possible.”

Johnson & Johnson intends to distribute vaccine to the U.S. government immediately following authorization, and expects to supply 100 million doses to the U.S. in the first half of 2021.

JNJ last traded at $161.99.

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Prevail Therapeutics sold for $1.04 billion

Eli Lilly to acquire Prevail Therapeutics for up to $26.50 per share in cash

Eli Lilly (LLY) and Prevail Therapeutics (PRVL) announced a definitive agreement for Lilly to acquire Prevail for $22.50 per share in cash payable at closing plus one non-tradable contingent value right, or CVR, worth up to $4.00 per share in cash, for a total consideration of up to $26.50 per share in cash, or or an aggregate of approximately $1.04B.

Prevail sold for more than $1 billion

The CVR is payable upon the first regulatory approval of a product from Prevail’s pipeline as set forth in more detail below.

Prevail is a biotechnology company developing potentially disease-modifying AAV9-based gene therapies for patients with neurodegenerative diseases.

The acquisition will establish a new modality for drug discovery and development at Lilly, extending Lilly’s research efforts through the creation of a gene therapy program that will be anchored by Prevail’s portfolio of clinical-stage and preclinical neuroscience assets.

Eli Lilly announces Alimta label expanded by FDA, Stockwinners
Eli Lilly bets on Prevail’s Parkinson’s treatment

Prevail’s lead gene therapies in clinical development are PR001 for patients with Parkinson’s disease with GBA1 mutations and neuronopathic Gaucher disease and PR006 for patients with frontotemporal dementia with GRN mutations.

Prevail’s preclinical pipeline includes PR004 for patients with specific synucleinopathies, as well as potential gene therapies for Alzheimer’s disease, Parkinson’s disease, amyotrophic lateral sclerosis and other neurodegenerative disorders.

PROO1 is a promising drug for Parkinson’s

Under the terms of the agreement, Lilly will commence a tender offer to acquire all outstanding shares of Prevail Therapeutics Inc. for a purchase price of $22.50 per share in cash payable at closing plus one non-tradeable CVR.

The CVR entitles Prevail stockholders to up to an additional $4.00 per share in cash payable upon the first regulatory approval for commercial sale of a Prevail product in one of the following countries: United States, Japan, United Kingdom, Germany, France, Italy or Spain.

To achieve the full value of the CVR, such regulatory approval must occur by December 31, 2024.

If such regulatory approval occurs after December 31, 2024, the value of the CVR will be reduced by approximately 8.3c per month until December 1, 2028.

There can be no assurance any payments will be made with respect to the CVR. The transaction is not subject to any financing condition and is expected to close in Q1 of 2021, subject to customary closing conditions, including receipt of required regulatory approvals and the tender of a majority of the outstanding shares of Prevail’s common stock.

Following the successful closing of the tender offer, Lilly will acquire any shares of Prevail that are not tendered in the tender offer through a second-step merger at the same consideration as paid in the tender offer.

The purchase price payable at closing represents a premium of approximately 117% to the 60-day volume-weighted average trading price of Prevail’s common stock ended on December 14, the last trading day before the announcement of the transaction.

Prevail’s board of directors unanimously recommends that Prevail’s stockholders tender their shares in the tender offer.

Additionally, certain Prevail stockholders, beneficially owning approximately 51% of Prevail’s outstanding common stock, have agreed to tender their shares in the tender offer.

Upon closing, the impact of this transaction will be reflected in Lilly’s 2021 financial results according to Generally Accepted Accounting Principles.

There will be no change required to Lilly’s 2021 financial guidance being issued for research and development expense or non-GAAP earnings per share as a result of this transaction.

Prevail Therapeutics (PRVL) last traded at $22.67, up 81%.

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Big Rock Partners buys NeuroRx

NeuroRx to trade on Nasdaq following Big Rock Partners Acquisition merger

Big Rock Partners Acquisition (BRPA) announced that it has entered into an agreement and plan of merger with NeuroRx, a clinical stage, small molecule pharmaceutical company.

Big Rock shares jump on purchase of NeuroRx

NeuroRx develops novel therapeutics for the treatment of COVID-19 and Bipolar Depression.

Under the terms of the transaction, Big Rock and NeuroRx will merge and the company is expected to continue to trade on the Nasdaq Stock Market under the symbol (NRXP).

The transaction is expected to occur in the first or second quarter of 2021.

As a public Nasdaq-listed company, NeuroRx expects to have increased access to capital to continue development of its drug pipeline targeting Central Nervous System/Psychiatry and Respiratory Disease.

NeuroRx is a clinical stage, small molecule pharmaceutical company which develops novel therapeutics for the treatment of central nervous system disorders and life-threatening pulmonary disease.

NeuroRx’s two main drugs are Zyesami which is an application for COVID-related respiratory failure and NRX-101, which focuses on suicidal bipolar depression and PTSD.

Zyesami is a synthetic human vasoactive intestinal peptide, or VIP, a 28 amino-acid natural peptide with 50 years of research. NRX-101 is a fixed-dose combination of D-cycloserine and lurasidone that has advanced to phase 3 with FDA Breakthrough Therapy Designation, a Special Protocol Agreement, Biomarker Letter of Support, and Fast Track Designation.

NeuroRx’s management team is comprised of industry veterans, led by founder, Chairman & CEO Jonathan C. Javitt, MD, MPH, Robert Besthof, MIM (Chief Commercial Officer), William Fricker, MBA, CPA (Chief Financial Officer) and Alessandra Daigneault, JD (Corporate Secretary), who are expected to continue to run the combined company, post-transaction.

All officers and members of the board of Big Rock will resign in connection with the closing of the transactions.

The board of the combined company will initially consist of seven members, including Prof. Jonathan Javitt.

Under the terms of the transaction, Big Rock will issue to NeuroRx’s current equity holders an aggregate of 50M shares of Big Rock common stock for their interests in NeuroRx, representing $500M of equity consideration, assuming a value of $10.00 per common share.

Subject to certain conditions, an aggregate of 25M additional shares of Big Rock common stock will be issued to NeuroRx pre-merger equity holders if, prior to December 31, 2022, RLF-100 receives emergency use authorization by the FDA and the FDA accepts the company’s filing of its application to approve RLF-100.

In addition, subject to certain conditions, a $100M cash earnout may be payable to NeuroRx pre-merger equity holders if, prior to December 31, 2022, either FDA approval of the company’s COVID-19 Drug is obtained and the company’s COVID-19 Drug is listed in the FDA’s or FDA approval of the company’s Antidepressant Drug Regimen is obtained and the company’s Antidepressant Drug Regimen is listed in the FDA’s “Orange Book”.

The boards of both NeuroRx and Big Rock have unanimously approved the proposed transaction.

Completion of the transaction is subject to approval by stockholders of NeuroRx and Big Rock and other customary closing conditions.

BRPA is up 30% to $15.50.

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Pluralsight sold for $3.5 billion

Pluralsight to be acquired by Vista for $20.26 per share in cash

Pluralsight (PS) announced that it has entered into a definitive agreement to be acquired by Vista Equity Partners.

Pluralsight sold for $3.5 billion

Pluralsight, Inc. operates a cloud-based technology skills platform in the United States, Europe, the Middle East, Africa, and internationally. Its platform products include Pluralsight Skills for individuals and teams to acquire technology skills through skill development experiences, such as skill assessments, a curated library of expert-authored courses, directed learning paths, interactive content, and business analytics; and Pluralsight Flow, which gives technology leaders objective data and visibility into workflow patterns to measure the productivity of their software developers. 

Under the terms of the agreement, Vista, in partnership with its institutional co-investors including Partners Group, will acquire all outstanding shares of Pluralsight common stock for $20.26 per share in an all-cash transaction valued at approximately $3.5B.

Company has benefited from “stay home”

The purchase price represents a premium of approximately 25% to the company’s volume weighted average closing stock price for the 30 trading days prior to today’s announcement.

The deal has been unanimously approved and recommended by an independent Transaction Committee and then unanimously approved by the Pluralsight board.

Vista gambles $3.5 billion on cloud based learning

Pluralsight has also entered into a voting agreement with certain of its shareholders, under which such shareholders have agreed to vote all of their Pluralsight shares in favor of the transaction.

The Pluralsight shares subject to the voting agreement represent a majority of the current outstanding voting power of Pluralsight shares. “In response to receipt of unsolicited acquisition interest, Pluralsight engaged in a robust process, including evaluating transaction alternatives against Pluralsight’s standalone plan and other strategic alternatives,” the company said.

The transaction is expected to close in the first half of 2021. PS closed at $18.98.

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Waddell & Reed sold for $1.7 billion

Macquarie to acquire Waddell & Reed for $25 per share

Waddell & Reed (WDR) announced it has entered into a merger agreement with Macquarie Asset Management, the asset management division of Macquarie Group (MQBKY), under which Macquarie would acquire all of the outstanding shares of Waddell & Reed for $25.00 per share in cash representing total consideration of $1.7B.

The transaction represents a premium of approximately 48% to the closing price of Waddell & Reed common stock on December 1, 2020, the last trading day prior to the transaction announcement, and a premium of approximately 57% to Waddell & Reed’s volume-weighted average price for the last 90 trading days.

On completion of the transaction, Macquarie has agreed to sell Waddell & Reed Financial, Inc.’s wealth management platform to LPL Financial Holdings Inc. (LPLA), a U.S. retail investment advisory firm, independent broker-dealer, and registered investment advisor custodian, and also enter into a long-term partnership with Macquarie becoming one of LPL’s top tier strategic asset management partners.

As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over $465B, with the combined business becoming a top 25 actively managed, long-term, open-ended U.S. mutual fund manager by assets under management, with the scale and diversification to competitively position the business to maintain and extend its high standards of service to clients and partners.

The transaction has been approved by the Boards of Directors of Waddell & Reed Financial, Inc., Macquarie Group and LPL and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed Financial, Inc. stockholder approval and other customary closing conditions.

Waddell & Reed Financial, Inc. provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. 

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DOJ approves sale of Credit Karma to Intuit

Intuit gets DOJ nod to buy Credit Karma after pact to sell tax unit to Square

Intuit (INTU) and Credit Karma announced that they have entered into a consent decree with the U.S. Department of Justice, or DOJ, which they call “an important step” in completing their previously announced merger.

The companies also announced that they have entered into an Assurance of Discontinuance with the New York State Attorney General that, along with the DOJ action, moves Intuit’s acquisition of Credit Karma “one step closer to closing,” subject to the satisfaction of customary closing conditions.

Intuit and Credit Karma also announced Credit Karma’s agreement with Square (SQ), pursuant to which Credit Karma will divest its Credit Karma Tax business to Square.

The completion of the transaction with Square is contingent upon the successful closing of Intuit’s acquisition of Credit Karma, among other customary closing conditions.

As part of the divestiture transaction, Intuit and Credit Karma have made certain commitments to Square, including the provision of certain transition services to help ensure a successful transition of the business.

“We are very excited to reach this important milestone today. This brings us one step closer to transforming personal finance by making it simpler for consumers to find the right financial products, put more money in their pockets, and provide financial expertise and advice.

We are pleased to have cleared this necessary regulatory review with DOJ and appreciate their careful consideration of this transaction.

Consumers will continue to benefit from the Credit Karma Tax product as part of Square,” said Sasan Goodarzi, CEO of Intuit.

Shares of Square (SQ) are up 5.2% while Intuit shares are up 1.5%.

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Consolidation in digital healthcare continues!

GigCapital2 to combine with UpHealth, Cloudbreak Health in $1.35B merger

GigCapital2 (GIX) announced that it has entered into two separate definitive business combination agreements with each of UpHealth and Cloudbreak Health to form a combined entity that will create a publicly traded, global digital healthcare company.

Digital healthcare has become more prevalent during the pandemic

Upon the closing of the transaction, the combined company will be named UpHealth and will continue to be listed on the NYSE under the new ticker symbol (UPH).

Following the combination, UpHealth will be a global digital healthcare company serving an entire spectrum of healthcare needs and will be established in fast growing sectors of the digital health industry.

With its combinations, Upon closing the pending mergers and the combination with Cloudbreak, UpHealth will be organized across four capabilities at the intersection of population health management and telehealth: Integrated Care Management, Global Telehealth, Digital Pharmacy, and Tech-enabled Behavioral Health.

Following the consummation of the transactions, UpHealth will have agreements to deliver digital healthcare in more than 10 countries globally.

These various companies are expected to generate approximately $115M in revenue and over $13M of EBITDA in 2020 and following the combination, UpHealth expects to generate over $190M in revenue and $24M in EBITDA in 2021.

The business combinations were unanimously approved by the boards of directors of all parties, valuing the combined company at a combined pro forma enterprise value of approximately $1.35B.

The proposed business combinations are expected to be completed in Q1 2021, subject to, among other things, the approval by GigCapital2 stockholders, regulatory approvals, and the satisfaction or waiver of other customary closing conditions.

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Xilinx sold for $35 billion

Xilinx to be acquired by AMD for $35B in all-stock transaction

AMD (AMD) and Xilinx (XLNX) announced they have entered into a definitive agreement for AMD to acquire Xilinx in an all-stock transaction valued at $35B.

Under the terms of the agreement, Xilinx stockholders will receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction.

Xilinx makes programmable logic devices

Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock. Post-closing, current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis, while Xilinx stockholders will own approximately 26%.

The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

AMD expects to achieve operational efficiencies of approximately $300 million within 18 months of closing the transaction, primarily based on synergies in costs of goods sold, shared infrastructure and through streamlining common areas.

AMD goes shopping taking advantage of Intel’s troubles

The transaction has been unanimously approved by the AMD and Xilinx Boards of Directors.

The acquisition is subject to approval by AMD and Xilinx shareholders, certain regulatory approvals and other customary closing conditions.

The transaction is currently expected to close by the end of calendar year 2021.

Until close, the parties remain separate, independent companies. Dr. Lisa Su will lead the combined company as CEO. Xilinx President and CEO, Victor Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction.

In addition, at least two Xilinx directors will join the AMD Board of Directors upon closing.

Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. The company offers integrated circuits (ICs) in the form of programmable logic devices (PLDs), such as programmable system on chips, and three dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores. XLNX closed at $114.55.

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PNM Resources sold for $4.3B

PNM Resources to be acquired by Avangrid for $50.30 per share

PNM Resources (PNM) announced with Avangrid (AGR) that they have entered into a definitive agreement under which Avangrid will acquire all the outstanding shares of PNM Resources.

The agreement, which has been unanimously approved by both companies’ boards, creates a U.S. regulated utility and renewable energy platform.

PNM sold for $4.3B

Under the terms of the agreement, PNM Resources shareholders will receive $50.30 in cash for each share of PNM Resources common stock held at closing, representing an equity value of approximately $4.3B.

The proposed transaction implies a 19.3% premium to PNM Resources 30-day volume weighted average price, or VWAP, as of October 20.

The combination creates a larger, more diversified regulated utility and renewable energy company with electric and gas utilities.

Regulated utility operations expand under the transaction and provide increased operational and regulatory diversification, serving more than 4M electric and natural gas customers of 10 regulated utilities across New York, Connecticut, Maine, Massachusetts, New Mexico, and Texas.

These combined operations are supported by $14B of rate base, including more than 104,000 miles of electric transmission and distribution lines.

PNM Resources operations will continue to be overseen locally and the current headquarters of the utilities in New Mexico and Texas will remain.

Pat Vincent-Collawn will step down as chairman, president and CEO upon closing of the transaction. Don Tarry, current CFO of PNM Resources, will oversee the continuing operations of PNM and TNMP.

Two directors from the current PNM Resources board will serve as independent directors of Avangrid. One director from the current PNM Resources board will also serve on the board of the Avangrid Networks business.

PNM remains committed to exiting coal through the approved abandonment of San Juan Generating Station in 2022 and the continued efforts to exit its 200-megawatt ownership interest in the Four Corners Power Plant earlier than originally planned.

PNM sees the potential for additional customer savings by exiting the plant sooner than the expiration of the ownership and coal supply agreements in 2031.

An earlier exit from Four Corners also opens the door for the combined company to bring additional renewable resources onto the grid in support of New Mexico’s increasing renewable energy standards and 2045 carbon-free mandate.

The transaction is subject to PNM Resources shareholder approval, regulatory approvals from the New Mexico Public Regulation Commission, Public Utility Commission of Texas, Federal Energy Regulatory Commission, Department of Justice, Nuclear Regulatory Commission, Federal Communications Commission and Committee on Foreign Investment in the United States, and other customary closing conditions.

The transaction is expected to close between October and December 2021.

PNM closed at $45.74. AGR closed at $54.06.

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Concho Resources sold for $49 per share

ConocoPhillips, Concho Resources to combine in all-stock transaction

ConocoPhillips (COP) and Concho Resources (CXO) announced that they have entered into a definitive agreement to combine companies in an all-stock transaction.

ConocoPhillips buys Concho Resources

Under the terms of the transaction, which has been unanimously approved by the board of directors of each company, each share of Concho Resources common stock will be exchanged for a fixed ratio of 1.46 shares of ConocoPhillips common stock, representing a 15% premium to closing share prices on October 13.

The transaction will create a company with an approximately $60B enterprise value.

The combined company will hold approximately 23B barrels of oil equivalent, or BBOE resources with an average cost of supply of below $30 per barrel WTI. The transaction brings together acreage positions across the Delaware and Midland basins that also includes leading positions in the Eagle Ford and Bakken in the Lower 48 and the Montney in Canada.

The companies announced that together they expect to capture $500M of annual cost and capital savings by 2022.

The identified savings will come from lower general and administrative costs and a reduction in ConocoPhillips’ future global new ventures exploration program. This de-emphasis of ConocoPhillips’ organic resource addition program is driven by the addition of Concho’s large, low-cost resource base.

Additional supply chain, commercial and drilling and completion capital efficiency savings are not yet included in these cost-reduction estimates. ConocoPhillips will offer a compelling ordinary dividend supplemented by additional distributions as needed to meet its target distribution of greater than 30% of cash from operations.

Low oil prices and soft demand forces Concho to sell

The company seeks to maintain a strong investment-grade credit rating across price cycles. On a pro forma basis, the combined company net debt is approximately $12B as of June 30, representing an attractive leverage ratio of 1.3 at 2021 consensus commodity prices.

Upon closing, Concho’s chairman and CEO Tim Leach will join ConocoPhillips’ board of directors and executive leadership team as executive vice president and president, Lower 48. This transaction will enhance the company’s competitive position in Midland.

The transaction is subject to the approval of both ConocoPhillips and Concho stockholders, regulatory clearance and other customary closing conditions. The transaction is expected to close in the first quarter of 2021.

In the meantime, an integration planning team consisting of representatives from both companies will be formed to ensure required business processes and programs are implemented seamlessly post-closing.

In light of the pending merger, ConocoPhillips has suspended share repurchases until after the transaction closes.

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Acorn International sold for $21 per share

Acorn International enters merger agreement for going private transaction

Acorn International (ATV) announced that it has entered into a definitive agreement and plan of merger with First Ostia Port, a Cayman Islands exempted company and its wholly owned subsidiary Second Actium Coin, a Cayman Islands exempted company, pursuant to which, the merger sub will merge with and into the company thereby becoming a wholly-owned subsidiary of the controlling shareholder.

Acorn taken private

Acorn International, Inc. develops, promotes, and sells a portfolio of proprietary-branded products in the People’s Republic of China. The company operates through two segments, Direct Sales and Distribution Sales.

The company will be acquired in an all-cash transaction by the controlling shareholder.

Pursuant to the terms of the merger agreement, each ordinary share, par value 1c per share, of the company, including shares represented by American Depositary Shares, each representing twenty shares, issued and outstanding immediately prior to the effective time, other than the excluded shares shall be cancelled in exchange for the right to receive $1.05 in cash per share without interest.

As each ADS represents twenty shares, each ADS issued and outstanding immediately prior to the effective time, other than ADSs representing excluded shares, shall represent the right to receive $21.00 in cash without interest pursuant to the terms and conditions set forth in the merger agreement.

The per share merger consideration represents a premium of 44.1% over the company’s closing price of $14.57 per ADS as quoted on the New York Stock Exchange, or NYSE, on August 17, the last trading day prior to the day when the company received a non-binding “going private” proposal from the controlling shareholder.

The merger consideration also represents an increase of approximately 38.0% over the $15.22 per ADS offered by the controlling shareholder in its revised going-private proposal on August 18 and a premium of approximately 39.4% over the company’s closing price of $15.07 per ADS on October 9, the last trading day prior to issuance of this press release.

The controlling shareholder intends to fund a substantial portion of the consideration for the merger in the form of debt funding from a third-party lender and has delivered to the company duly executed copies of the loan and security agreement.

The board, acting upon the unanimous recommendation of a committee of independent directors established by the board, approved the merger agreement and the merger.

The special committee negotiated the terms of the merger agreement with the assistance of its independent financial and legal advisors.

The merger, which is currently expected to close during the last quarter of 2020, is subject to customary closing conditions, including the approval of the merger agreement by a requisite company vote of shares representing at least two-thirds of the voting power of the shares present and voting in person or by proxy at a meeting of the company’s shareholders which will be convened to consider the approval of the merger agreement and the merger. 

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Eaton Vance sold for $7B

Morgan Stanley to acquire Eaton Vance for $7B in cash, stock transaction

Morgan Stanley (MS) and Eaton Vance (EV) have entered into a definitive agreement under which Morgan Stanley will acquire Eaton Vance for an equity value of approximately $7B.

Eaton Vance sold to Morgan Stanley

Morgan Stanley Investment Management, or MSIM, will be an asset manager with approximately $1.2T of AUM and over $5B of combined revenues.

The company said MSIM and Eaton Vance are highly complementary with limited overlap in investment and distribution capabilities.

Morgan Stanley buys Eaton Vance for $7B

The combination will also bring Eaton Vance’s U.S. retail distribution together with MSIM’s international distribution.

The combination will position Morgan Stanley to generate financial returns through increased scale, improved distribution, cost savings of $150M and revenue opportunities.

By financing the transaction with 50% cash, Morgan Stanley will utilize approximately 100bps of excess capital, and the firm’s common equity tier 1 ratio is expected to remain approximately 300bps above the firm’s stress capital buffer requirement of 13.2%.

Eaton Vance Corp., through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. It also provides investment management and counseling services to institutions and individuals. 

The transaction is expected to be breakeven to earnings per share immediately and marginally accretive thereafter, with fully phased-in cost synergies, and add approximately 100bps to return on tangible common equity.

Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share.

Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock.

The merger agreement also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism.

In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources.

It is anticipated that the transaction will not be taxable to Eaton Vance shareholders to the extent that they receive Morgan Stanley common stock as consideration.

The transaction has been approved by the voting trust that holds all of the voting common stock of Eaton Vance. The acquisition is subject to customary closing conditions, and is expected to close in Q2 of 2021.

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American Renal Associates sold for $853M

American Renal Associates to be acquired by Nautic Partners for $11.50 per share

American Renal Associates (ARA) announced that it has entered into a definitive agreement to be acquired by Innovative Renal Care, an affiliate of Nautic Partners, a middle market private equity firm, in an all-cash transaction that values the company at an aggregate enterprise valuation of approximately $853M excluding non-controlling interest.

ARA sold for $11.50 per share

Under the terms of the agreement, ARA shareholders will receive $11.50 per share in cash.

This consideration represents an approximate premium of 66% to the company’s closing price on October 1.

The board of ARA unanimously approved the agreement. The transaction is expected to close in Q1 of 2021, subject to shareholder and regulatory approvals, as well as the satisfaction of customary closing conditions.

Centerbridge Partners has entered into a voting agreement pursuant to which it has agreed to vote in favor of the transaction.

The agreement includes a 40-day “go-shop” period, which permits ARA’s board, with the assistance of independent financial and legal advisors, to actively solicit alternative acquisition proposals from third parties, and potentially enter into negotiations with parties that make alternative acquisition proposals.

The board has appointed a special committee of independent directors to oversee the go-shop process.

ARA will have the right to terminate the agreement with Nautic to enter into a superior proposal subject to the terms and conditions of the agreement.

There can be no assurance that this process will result in a superior proposal, and ARA does not intend to disclose developments with respect to the solicitation process unless and until its special committee or the board makes a determination requiring further disclosure. The period commences on the date of the agreement.

ARA closed at $6.92.

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Arm Holdings sold for $40 billion

Nvidia to buy Arm Holdings from Softbank

Nvidia (NVDA) confirmed that it intends to buy chip design giant Arm Holdings for a total of up to $40 billion from existing owner SoftBank (SFTBY), which bought the company for $32 billion in 2016.

Arm Holdings chips power smart phones

SoftBank  will immediately receive $2 billion in cash for signing the deal. Then, it will receive another $10 billion in cash and $21.5 billion of stock in Nvidia at closing. That stake will be likely just a bit shy of 10% of the company.

Softbank bought Arm in 2016 for $32 billion

In addition, SoftBank is slated to earn $5 billion in a mix of cash and stock as a performance-based earn-out. Conditions or timing for that earn-out were not disclosed.

Nvidia buys Arm Holdings for $40 billion

Analysts’ Comments

Should Nvidia’s (NVDA) acquisition of SoftBank’s (SFTBY) ARM be allowed to proceed, it would create a “landscape-changing entity” that would combine two leading GPU and CPU architectures into a “single powerful ecosystem,” Deutsche Bank analyst Ross Seymore tells investors in a research note.

However, it this point that is likely to create the pushback from competitors and customers, says the analyst. Seymore questions whether ARM licensees would support an Nvidia acquisition saying “there could be a myriad of conflict of interest issues” whereby Nvidia could have access to competitor strategies and technologies in a variety of Nvidia-targeted markets. Seymore keeps a Hold rating on Nvidia shares.

Jefferies analyst Mark Lipacis raised the firm’s price target on Nvidia (NVDA) to $680 from $570 and keeps a Buy rating on the shares after the company announced an agreement to acquire ARM Holdings, subject to regulatory approvals. He views the deal as one that is “transformative” as it should position Nvidia to capture 80% of the ecosystem value in the data center and also unify the compute ecosystem between the edge and data center, Lipacis tells investors. Assuming the deal with Softbank (SFTBY) goes through, he thinks the merged company has a five-year EPS power of $50, said Lipacis, who also raised his “bull-case” target on Nvidia shares to $1,000.

RBC Capital analyst Mitch Steves keeps his Outperform rating on Nvidia (NVDA) after the company confirmed its acquisition of ARM Holdings last night, saying the transaction would be a positive if it can close amid the likely regulatory challenges to its completion. Steves adds that if the transaction closes, it would also be a “notable negative” for Intel (INTC), stating that Nvidia’s research and development funding would compete against Intel’s currently dominant x86 market share.

Wedbush analyst Matt Bryson made no change to his Outperform rating or $525 price target for Nvidia (NVDA) after the company and SoftBank (SFTBY) finalized an agreement whereby Nvidia will purchase ARM Holdings. While Bryson views the deal terms and expected synergies as favorable for Nvidia, the analyst believes it most likely will never be consummated unless the U.S./China relationship dynamic shifts considerably.

NVDA is up 5.8% to $514 while SFTBY is up 8.7% to $29.87.

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Walden University sold for $1.48B

Adtalem to acquire Walden University from Laureate Education for $1.48B in cash

Adtalem (ATGE) announced it has entered into a definitive agreement to acquire Walden University, an online healthcare education provider, from Laureate Education (LAUR), Inc. for $1.48B in cash.

With the addition of Walden, Adtalem will become a national healthcare educator, providing workforce solutions to employers through learning modalities with academic outcomes.

By adding Walden to its existing healthcare portfolio, Adtalem said it is better positioned to increase the talent supply to address the rapidly growing and unmet demand for healthcare professionals in the U.S. and globally.

The combined companies will have 90,000 students

The combined organization will have 26 campuses across 15 states and four countries, 6,100 faculty members, and more than 90,000 students with 34% African American enrollees.

The company said, “The acquisition is expected to provide significant potential for growth and margin expansion through new and expanded offerings as well as revenue and cost synergies.

These financial benefits are expected to lead to substantial gross margin and EBITDA margin expansion, and robust cash flow generation to invest in its offerings while paying down debt.”

Adtalem expects to generate upside to revenue by providing new and complementary educational offerings, increased student acquisition and retention capabilities as well as enhanced scale and coverage that will allow for new partnerships with large-sized employer partners in the healthcare sector.

The company noted, “The purchase price represents a compelling, pre-synergy adjusted EBITDA multiple of 8.4x, and the transaction is expected to contribute significantly to Adtalem’s free cash flow and earnings per share, generating $60 million in incremental free cash flow excluding special items in year one and adding $0.75 in earnings per share from continuing operations excluding special items in year two as synergies begin to offset the dilutive effect of purchase price accounting.”

Walden Univ. Campus

Adtalem expects to generate annual cost savings of approximately $60M driven by increased efficiencies in marketing spend and back office operations. Approximately $30M of these cost savings are anticipated within 12 months of closing and the remainder within 24 months of closing.

Additionally, Adtalem expects that this acquisition will generate between 10% and 12% ROIC beginning in year one, significantly exceeding the company’s current WACC of approximately 8%.

Adtalem expects to fund the cash consideration through a combination of cash from its balance sheet and committed debt financing.

Adtalem expects to realize the full potential of the transaction while maintaining a strong balance sheet.

The transaction is expected to close in Q1 of FY22, subject to regulatory approvals and other customary closing conditions.

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